On July 1, year 8, after recording interest and amortization, Acteon Company converted $1,000,000 of its 5% convertible bonds into 50,000 shares of $1 par value common stock. On the conversion date the fair value of the bonds was $1,250,000, Acteon’s common stock was publicly trading at $21 per share, and the unamortized bond premium and bond issue costs were $30,000 and $50,000, respectively. Using the book value method, what amount of additional paid-in capital should Acteon record as a result of the conversion?
On July 1, year 8, after recording interest and amortization, Acteon Company converted $1,000,000 of its 5% convertible bonds into 50,000 shares of $1 par value common stock. On the conversion date the fair value of the bonds was $1,250,000, Acteon’s common stock was publicly trading at $21 per share, and the unamortized bond premium and bond issue costs were $30,000 and $50,000, respectively. Using the book value method, what amount of additional paid-in capital should Acteon record as a result of the conversion?
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable
Section: Chapter Questions
Problem 21E: On July 2, 2018, McGraw Corporation issued 500,000 of convertible bonds. Each 1,000 bond could be...
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On July 1, year 8, after recording interest and amortization, Acteon Company converted $1,000,000 of its 5% convertible bonds into 50,000 shares of $1 par value common stock. On the conversion date the fair
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